Raise won't fix IT pay gap

By Colleen O'Hara

Aug 30, 1998

President Clinton this month approved a 3.6 percent pay raise in 1999 for federal civilian employees and military personnel, and he proposed a 4.4 percent increase for the following year. However, critics said the increase is not enough to lure workers into government information technology.

"An increase of 3.6 percent for federal employees would essentially allow federal pay to match the growth in private-sector wages," President Clinton said when he announced the move. Clinton asked Congress to approve the raise but said he will use his executive authority to guarantee that a 3.6 percent increase takes effect.

But observers said the move will achieve little to alleviate the ongoing IT brain drain within government. "IT majors are being hired out of college at $50,000 and $60,000 if they have a master's degree," said Ron Hack, director of the Office of Systems and Telecommunications Management at the Commerce Department.

"The equivalent federal pay is high $20,000 to low $30,000. Even if you are able to give hiring bonuses of about 25 percent, it leaves the government well short of being competitive."

Olga Grkavac, senior vice president of the Information Technology Association of America's Systems Integration Division, also said the pay increase probably is not sufficient to offset the 20 percent-a-year rise in IT salaries in the private sector. "There might be other reasons to work for the government," she said. "But if you're looking at salaries, while the pay raise will help, it will shorten the gap [between the private and public sectors] only slightly."

Grkavac added that signing bonuses, which are being offered in the private industry, have only just begun to be considered in the public sector on the state level. "Now high-tech workers expect a signing bonus," she said.

Hack said the government should recruit workers by offering more exciting assignments in technology and by highlighting job benefits, job security and the rewards of public service work.

"But it's a hard sell," Hack said. "The average chief information officer-level executive who leaves government gets a hefty raise. I don't have a rosy outlook for the government's ability to attract and retain the best and brightest IT professionals." Hack said the government should consider basing salaries on performance and perhaps offer managers more flexibility to give the best performers more pay. "But those projects are pretty rare and rather controversial among employees that don't do as well," he said.

The American Federation of Government Employees, a union representing government employees, agreed that the pay increase is not enough. "Rather than honestly addressing the growing pay inequality between the federal and private sectors, President Clinton has thumbed his nose at the federal work force by urging Congress to approve a pay raise that actually worsens the current pay gap," AFGE president Bobby Harnage said.

Because wages in the private sector are increasing at an annual rate of 4 percent, "an increase of 3.6 percent not only expands the current 12.75 percent pay disparity but reduces federal employee purchasing power," Harnage said. Growing health care premiums and higher retirement contributions also mean less take-home pay for workers, he added.

Democrats will vote on an appropriations package to reopen all the federal agencies shuttered during the partial shutdown, but the lack of wall funding will likely means the measure won't get a vote in the Senate.